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Additionally, the company recognized a non-recurring benefit from tax planning strategies in the fourth quarter, which decreased the annual reported tax rate to 32 percent. The adjusted tax rate and assumed rate going forward remains at 38 percent.
The impact to net income of all of the special items was $13.3 million of income.
Fourth quarter results
For the quarter ended December 31, 2004, sales were a record $1.2 billion, an increase of 16 percent from a year ago. Fourth quarter performance was driven by strong volume, operating performance and material cost recovery.
Automotive Group Results
In 2004, Automotive Group sales increased 13 percent to a record $1.6 billion. Adjusted to include pro forma results for Torrington for the full year of 2003, sales were up 7 percent. Sales grew due to increased light vehicle content from new products, medium and heavy truck market demand and favorable currency translation. Automotive Group earnings before interest and taxes (EBIT) in 2004 were $15.9 million, compared to $15.7 million in 2003. Profit improvement from sales growth and strong operating performance in 2004 was offset by high raw material costs.
In the fourth quarter of 2004, the Automotive Group recorded sales of $391.6 million, a 5 percent increase from a year ago. The Automotive Group recorded a loss of $1.9 million in the fourth quarter of 2004, compared to EBIT of $8.3 million for the same period a year ago. The Group was negatively impacted by rising raw material costs, but continued to make progress in recovering these cost increases.
Industrial Group Results
Industrial Group 2004 sales increased 14 percent from the prior year to a record $1.7 billion. Adjusted to include pro forma results for Torrington for the full year of 2003, sales were up 10 percent. The increase was driven by higher demand, increased prices and favorable foreign currency translation. Many end markets recorded substantial growth, with the strongest increases in construction, agriculture, rail and general industrial equipment. The Industrial Group also benefited from growth in emerging markets, especially China.
Industrial Group 2004 EBIT was $177.9 million, compared to $128.0 million in 2003. EBIT growth was due to leveraging increased volume, continued operating cost improvements and price increases.
Industrial Group sales in the 2004 fourth quarter increased to $449.0 million, up 7 percent from the prior year with continued market strength. EBIT was $47.6 million, compared to $44.5 million a year ago, reflecting strong demand and higher productivity.
Steel Group Results
Steel Group 2004 sales, including inter-segment sales, were a record $1.4 billion, up 35 percent from 2003. The sales growth reflected record shipments as well as surcharges and price increases driven by higher raw material costs. Demand increased in all end markets, led by strong industrial market growth. The group dramatically improved profitability, achieving EBIT of $54.8 million in 2004, versus a loss of $6.0 million in 2003. The improvement was due to volume, raw material surcharges and price increases.
In the fourth quarter of 2004, Steel